Deliverable 5 - Forecasting Methods and Applications
Buisness2021
MODULE5DELIVERABLETEMPLATE_V2.xlsxSheet1
| Income Statement | |||||
| All numbers in thousands | |||||
| Revenue | 2018 | 2017 | 2016 | 2015 | 2014 |
| Total Revenue | 806,338 | 766,083 | 529,515 | 450,557 | 486,280 |
| Cost of Revenue | 206,052 | 187,289 | 131,070 | 102,571 | 121,020 |
| Gross Profit | 600,286 | 578,794 | 398,445 | 347,986 | 365,260 |
| Operating Expenses | |||||
| Research Development | 116,445 | 99,205 | 78,269 | 69,791 | 59,880 |
| Selling General and Administrative | 262,699 | 220,728 | 166,110 | 151,651 | 383,240 |
| Total Operating Expenses | 379,144 | 319,933 | 244,379 | 221,442 | 443,120 |
| Operating Income or Loss | 221,142 | 258,861 | 154,066 | 126,544 | (77,860) |
| Income from Continuing Operations | |||||
| Total Other Income/Expenses Net | 13,432 | 7,603 | 8,011 | 418 | 504 |
| Net Income | 207,710 | 251,258 | 146,055 | 126,126 | (78,364) |
| Source: Congressional Budget Office | |||||
| Assumptions specific to Company | |||||
| Category | Assumption | ||||
| Total Revenue | Management projects revenue to continue same trend as previous 5 years | ||||
| Cost of Revenue | Management is implementing cost savings programs that should reduce the cost of revenue to approximately 2016 levels as a percentage | ||||
| Research Development | Management believes that new products are the life blood of the company and will continue with it current trend of R& D expenses | ||||
| Selling General and Administrative | Management projects that all other expense increases will be in line with Inflation |
3-Year IS Forecast
| FORECASTED DATA | HISTORIC DATA | |||||||||
| All numbers in thousands | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | ||
| Revenue | ||||||||||
| Total Revenue | $ 806,338 | $ 766,083 | $ 529,515 | $ 450,557 | $ 486,280 | |||||
| Cost of Revenue | $ 206,052 | $ 187,289 | $ 131,070 | $ 102,571 | $ 121,020 | |||||
| Gross Profit | $ 600,286 | $ 578,794 | $ 398,445 | $ 347,986 | $ 365,260 | |||||
| Operating Expenses | ||||||||||
| Research Development | $ 116,445 | $ 99,205 | $ 78,269 | $ 69,791 | $ 59,880 | |||||
| Selling General and Administrative | $ 262,699 | $ 220,728 | $ 166,110 | $ 151,651 | $ 383,240 | |||||
| Total Operating Expenses | $ 379,144 | $ 319,933 | $ 244,379 | $ 221,442 | $ 443,120 | |||||
| Operating Income or Loss | $ 221,142 | $ 258,861 | $ 154,066 | $ 126,544 | $ (77,860) | |||||
| Income from Continuing Operations | ||||||||||
| Total Other Income/Expenses Net | $ 13,432 | $ 7,603 | $ 8,011 | $ 418 | $ 504 | |||||
| Net Income | $ 207,710 | $ 251,258 | $ 146,055 | $ 126,126 | $ (78,364) | |||||
| PROJECTIONS | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | AVERAGE | PERCENT |
| Revenue YOY | ERROR:#DIV/0! | ERROR:#DIV/0! | ||||||||
| Cost of Revenue YOY 2016 | ERROR:#DIV/0! | ERROR:#DIV/0! | ||||||||
| Research Development YOY | ERROR:#DIV/0! | ERROR:#DIV/0! | ||||||||
| SG&A Trend Inflation rates or PCE price index | 2.1 | 2.1 | 2.1 | 2.1000 | 2% | |||||
| Total other income/expenses | ERROR:#DIV/0! | ERROR:#DIV/0! |
Graphs
Summary Table 1. CBO’s Projections of Key Economic Indicators for Calendar Years 2018 to 2028
Annual Average
Actual, 2017
2018
2019
2020
2021– 2022
2023– 2028
Percentage Change From Fourth Quarter to Fourth Quarter
Gross Domestic Product Reala
2.6
3.3
2.4
1.8
1.5
1.7
Nominal 4.5 5.2 4.5 3.9 3.7 3.9 Inflation
PCE price index 1.7
1.8
2.0
2.1
2.1
2.0
Core PCE price indexb 1.5 1.9 2.1 2.2 2.1 2.0
Annual Average Unemployment Rate (Percent) 4.4 3.8 3.3 3.6 4.4 4.8 Payroll Employment (Monthly change, in thousands)c 181 211 182 62 25 57 Interest Rates (Percent)
Three-month Treasury bills 0.9
1.9
2.9
3.6
3.7
2.8
Ten-year Treasury notes 2.3 3.0 3.7 4.1 4.1 3.7
Summary Table 1.
CBO’s Projections of Key Economic Indicators for Calendar Years 2018 to 2028
Annual Average
Actual,
2017
2018
2019
2020
2021–
2022
2023–
2028
Percentage Change From Fourth Quarter to Fourth Quarter
Gross Domestic Product
Reala
2.6
3.3
2.4
1.8
1.5
1.7
Nominal 4.5 5.2 4.5 3.9 3.7 3.9
Inflation
PCE price index
1.7
1.8
2.0
2.1
2.1
2.0
Core PCE price indexb 1.5 1.9 2.1 2.2 2.1 2.0
Annual Average
Unemployment Rate (Percent) 4.4 3.8 3.3 3.6 4.4 4.8
Payroll Employment (Monthly change, in thousands)c 181 211 182 62 25 57
Interest Rates (Percent)
Three-month Treasury bills
0.9
1.9
2.9
3.6
3.7
2.8
Ten-year Treasury notes 2.3 3.0 3.7 4.1 4.1 3.7
CategoryAssumption
Total RevenueManagement projects revenue to continue same trend as previous 5 years
Cost of Revenue
Management is implementing cost savings programs that should reduce the cost of revenue
to approximately 2016 levels as a percentage
Research Development
Management believes that new products are the life blood of the company and will continue
with it current trend of R& D expenses
Selling General and Administrative
Management projects that all other expense increases will be in line with Inflation
CBO's Projections of Key Economic Indicators 2023-20282021-20222020201920182017
Annual Average GDP Percentage1.71.51.82.43.32.6
Nominal Inflation4.55.24.53.93.73.9
PCE Price Index22.12.121.81.7
Core PCE Price Index22.12.22.11.91.5
Unemployment Rate (Percent)4.84.43.63.33.84.4
Payroll Employment (Monthly change, in thousands)572562182211181
Interest Rates (Percent)2.83.73.62.91.90.9
Ten - year Treasury notes3.74.14.13.732.3
